Naira Fall: Fear Grips Nigerians in Foreign Schools

MOTUNRAYO JOEL writes that, Nigerian parents and students are feeling the pangs of the devaluation of the naira.

Adebayo Bakare, a Nigerian studying at Kharkiv National Medical University, Russia, couldn’t withhold his anger as he narrated the ordeal he now suffers due to the devaluation of the nation’s currency, the naira.

Bakare told SUNDAY PUNCH that the slump of the naira against the United States dollar was frightening

He said he had to cut down his personal expenditure so he could pay his fees.

“I have been sad since the oil slump which led to the decline of the naira began; I have had to cut down on so many things so that I can pay my fees fully. Recently when I went to pay my registration fee, I was surcharged $500 for late payment. We Nigerians schooling abroad are at the receiving end because whether the naira weakens or not, our fees are fixed. The school management doesn’t care if one’s parents have to change more naira notes to buy dollars, all they want is their money. Some months ago, when my father transferred $200 to me, it was just enough for me to sort out personal and school expenses, but now the same amount is not enough,” Bakare said.

But as dire as his condition is, Bakare is helpless.

“I can’t work because I don’t have a work permit yet. I have become so anxious; anytime I hear my phone beep I’m in a hurry to check if it is my bank alerting me of a credit transaction. Sometimes, I just wish things were different,” he said.

Bakare isn’t the only one feeling the pangs, Akwara Michael and Gideon Aina, both students in Ukraine and the US respectively, are in a similar boat. But for Aina, things may be a little different because his tuition fee was already paid before the drop in oil price.

He said, “The implication of all what is happening is that more Naira notes will need to be sent for my fees compared to before and I’m not happy about it. But, I am quite lucky; I paid my last fees just before the spike in Forex. Thus, it hasn’t affected me much. But any cash my parents plan to send to me now will translate to lesser amount in dollars,” he said.

Similarly, Chidinma Obike a student of International Business in Canada, had paid her fees before the slump. She paid in May, 2014.

Aina

Aina, a post-graduate student of Business Informatics, Northern Kentucky University, described the situation as an unpleasant experience. He added that some of his friends had intentionally delayed receiving funds from their parents hoping to wait until the dollar exchange rate improves.

Oil prices have been in steep decline since June, 2014. That month, a barrel of crude oil sold for $115 per barrel. In November 2014, it slid to between $70 to $80. In December 2014, there was a sharp drop when the price fell to $56.

According to financial experts, within two months the naira/dollar exchange rate had gone from N160 to N190 to a dollar. However, at parallel market, one may buy a dollar for as high as N194. The euro and pound, on the other hand, are sold for between N294 and N296, and N236 to N238, respectively.

The implications of the fall in the value of the naira include the fact that Nigerians who have children and wards schooling abroad will have to spend more naira to buy foreign currencies. Compared to months back when $5,000 would fetch them N840,000, parents will now need to part with N970,000, an increase of 15.4 per cent.

Obike

However, Obike expressed the hope that the naira would pick up this year before another fee is due. But, this may remain only a dream. In a recent report, the Acting National President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, predicted that the dollar would likely sell for N200 to a dollar at the parallel market.

For parents like Mrs. Ebna Anukwuem and Mrs. Annette Osayende whose children school in the United Kingdom, the development has placed a restriction on their spendings.

Anukwuem said, “I can’t go out like I used to, I now have to be careful with how I spend money. Some months ago, I could take a drive to the mall without thinking twice, but now things are different, I stay at home more often.”

Another parent, Mrs. Iyabode Ajayi, an employee of a multinational company who has a son in Russia said things had become difficult and that she prayed she would be able to see him through his studies.

“I am struggling to meet up with my son’s demands. It is just unbelievable how the naira got devalued within a short spate of time. If only I had a vision that this would happen to the naira, I would have bought more dollars and paid for my son’s tuition in advance,” she said.

Akwara

Akwara, an Electrical Engineering student studying in Ukraine said things were not any different in Ukraine.

“I am really at a loss; since the naira began dropping, any money I have received has not been enough. I have been following reports on this issue and I think there are people behind the naira fall. At the moment, the exchange rate between the US dollar and Ukraine hryvnia is one to 15. By the time I receive the money my parents send to me in dollars, I’m practically left with nothing, and I still have to convert the money to hryvnia,” he said.

Meanwhile, some educationists have described sending students abroad for schooling as a waste of money. In 2012, the Exam Ethics International, a non- governmental organisation, said Nigerians spent over N1.5 trillion on students studying abroad. Annually, Ghana, according to the report, gets N160bn of Nigerian students’ funds, while Nigerians spend over N80 billion on education in the UK.

Dr. Solomon Omatsola Azumurana of the Department of English, University of Lagos, however, does not consider sending children abroad for schooling as waste of funds.

He said, “Anybody reserves the right to send his/her wards to anywhere in the world for tertiary education. It is a matter of choice. But like every choice made by an individual in life, such a parent must be prepared to bear the cost or any other issue that derives from such decision. The real issue is not whether or not Nigerian parents who send their children overseas to acquire university education are groaning because the naira has terribly weakened against the dollar, but the reason why they send their children abroad. Do Ghanaian and Togolese parents, for instance, send their children overseas for university education as much as Nigerian parents? Do parents of any of the neighbouring countries in the West-African sub-region presently send their wards to Nigeria for tertiary education?

“Nigeria has become a Mecca of sort or ‘dumping ground’ for the international education market. There is hardly any month in which an education fair by foreigners is not staged in Lagos, Abuja, and Port-Harcourt. The situation has become so bad that Nigerian children are now sent to Ukraine, Yugoslavia, India, Ghana, Togo, and the Republic of Benin for university education.”

He said it was unfortunate that the naira had weakened against the dollar, and that it might even continuously “nose dive” against the US currency taking into account that Nigeria operates a mono-economy.

“It is also unfortunate that while a country like Saudi Arabia has a foreign reserve of $742 million, Nigeria has just $39million. It then means that very difficult times are ahead for Nigerians as long as the prices of crude oil fall in the international market since there is not enough foreign reserve to cushion the effect.”

In the same vein, Dr. Lanre Olaniyan of the Department of Economics, University of Ibadan, said Nigerian universities cannot accommodate the number of persons who applied for admission.

“In 2013, the Joint Admissions Matriculation Board sold about 1.5 million application forms and only about a million of them scored 180 and above. Nigeria has 120 universities with the capacity to admit about 350,000 students. The implication of this is there would be about a million candidates who applied for JAMB but won’t get admission. Thus, parents send their children abroad because they know there is the tendency for their children not to get into universities in Nigeria.

“Also, parents who send their children abroad for tertiary education have realised that the amount of money they pay for secondary education and the amount they would spend on tertiary education abroad isn’t different. Sometimes, they spend more on secondary education than tertiary.”

According to Olaniyan, the solution is for the Federal Government to expand universities and erase the mentality that one needs a degree to get a good job.

But, Prof. Abayomi Adebayo of the Department of Economics, Obafemi Awolowo University, Ile-Ife, said foreign education might add to naira devaluation due to some factors, he said.

“Many of our universities are not up to standard. This has been one of the reasons why many parents send their children abroad. Also, economically, utility of every naira to a rich man is different for the average man. These parents are fulfilling their needs, they have a right to spend their money as they please. However, for a country like Nigeria that is looking for foreign currency to support its economy, parents sending their children abroad may be a waste of money,” he said.

Meanwhile, with the prevailing situation, educational consulting services may witness a decrease in patronage.

Attesting to this, the Client Service Officer, Trusted Edge Consult, Lagos, Kemi Adebisi, said, “ During my discussion with parents, many of them said they are having double thoughts sending their children abroad. A lot of them said they may opt for cheaper universities here and in selected countries abroad.”